Addressing threats to health care's core values, especially those stemming from concentration and abuse of power. Advocating for accountability, integrity, transparency, honesty and ethics in leadership and governance of health care.

Friday, January 30, 2015

A few news media outlets in California have reported on what has been up to now a very rare event - a strike by physicians. An initial summary was in an article in the San Diego Union - Tribune, whose title was

First U.S. Doctors' Strike in Decades

A
handful of doctors providing medical services to students at UC San
Diego — and their colleagues at nine other University of California
campuses — went on strike Tuesday.

It's
the first time in 25 years that fully licensed doctors are picketing a
U.S. employer, according to the Union of American Physicians and
Dentists, which represents the physicians at the UC schools.

The
work stoppage began at 7:30 a.m. and is scheduled to last one day. It
involves 150 health center doctors who manage the primary care and
mental health needs of students.

A second article in the Union-Tribune suggested that the point of contention between the union and the University of California administration was not primarily wages,

Collective bargaining has not gone smoothly
for UC student services doctors who voted to join the Union of American
Physicians and Dentists in November 2013. The two sides have not been
able to agree on a contract. Union members voted for the one-day strike
after accusing the university system of refusing to provide key
financial information that would aid their negotiations.

The central unfair labor practice complaint centers on the university's
refusal to disclose basic financial data to doctors as part of the
negotiations, according to Dr. Jeff Nelson, a UC Berkeley physician and a
member of the bargaining team.

'We have asked UC for financial information as to where their funding
sources are and what kind of finding they have, and they're not giving
that, even though as a public institution, they're required to,' Nelson
told me this morning at a rally outside the Tang Center where UC
Berkeley students receive health services. Citing the $3.1 billion fundraising campaign UC Berkeley completed last year, he added: 'They have an awful lot of money.'

Without the financial statistics the union has requested, UAPD can't
fairly negotiate and settle a contract, said Sue Wilson, a UAPD
spokesperson. 'We have a right to certain information that we need in
order to bargain a contract.' For example, she said, the union has
sought information about the recently approved 20 percent salary increases for
chancellors, but hasn't had any luck getting the details it
requested. Wilson said the union has also filed an unfair labor practice
charge regarding UC's recent decision to require UAPD doctors to
contribute more money to their pensions, despite the fact that
university officials originally said they would make those changes
through the contract negotiations. 'It shows a lack of respect,' she
said.

Apparently, the striking doctors want more money not for salaries, but to improve services to patients, as discussed in the second Union-Tribune article,

Dr.
Amol Doshi, one of the staff physicians who didn’t report to work
Tuesday, said his decision to join the union and to strike came down to
disagreements with management over how student health services is run.

He said only about 15 minutes is provided for each patient, regardless
of whether that student has one or several medical issues that need to
be addressed.

'We feel
like our professional autonomy is being compromised in how we can take
care of our patients. We feel that the number of patients that we’re
asked to see, many of whom have mental health concerns, require more
time and more staffing,' Doshi said.

The East Bay Express noted the UC administration's response did not deal with the substance of these issues,

Reached for comment today, a UC Berkeley spokesperson referred me to the
UC Office of the President. Shelly Meron, a spokesperson for that
office, dismissed the union's complaints in a phone interview this
morning.'"They say this is about unfair labor practice charges. We
believe this is simply a negotiation tool.' Meron said the president's
office does not comment on the specifics of unfair labor practice
charges and declined to answer questions about the union's claims
regarding financial disclosures and the pension policy.

Note that so far this story has been reported nationally only in one small item by Reuters.

Unions as One Method to Address the Plight of the Corporate Physician

So, to summarize, a small group of unionized physicians employed by the student health services of the University of California called a one day strike to protest infringements of their autonomy, particularly requirements that they see patients too quickly for what they believe to be the patients' good, and failure to provide budgetary information relevant to the university's financial capacity to provide better services. The physicians suspect the university has sufficient money to do so, especially given generous raises given to university managers.

The issues these physicians seem to be facing are familiar aspects of the plight of the American corporate physician. To recap the background, decades ago, most US physicians worked as solo entrepreneurs, or for small, physician owned groups. Those few who were employed worked for small non-profits, like the local teaching hospital, or local or US government. That has all changed.

Now increasing numbers of physicians are employed by increasingly large non-profits, such as hospital systems, or for-profit corporations. A 2013 Medscape article reported that the then current rate of employment was over 50%.

As such these physicians often report ultimately to managers, administrators, bureaucrats, and executives (MABEs). Many of the people they report do may not be physicians or health care professionals. Instead, they are likely to be generic managers, trained in business and management schools, with no direct experience in health care, and unclear commitment to its value. (The 2013 Medscape article cited above included results of survey suggesting the top complaint of employed physicians was being "bossed around by less-educated admins.")

Worse, many generic managers have bought into the primacy of short-term revenue over all other considerations, including patients' and the public's health. Examples of mission hostile management in health care thus now abound.

In parallel, most top corporate leaders have received increasingly generous compensation, far more generous than non-management employees, including health care professionals get, and that compensation seems to rise regardless of the quality of health care their organizations provide, or even their organizations' financial performance. (For example, see this post.)

In the media, and even the medical and health care literature, the rise of the employed, corporate physician has been celebrated, or at least accepted as inevitable. For example, see this post on a Forbes blog by a non-physician pundit with the title, "Physicians want employment, not Marcus Welby MD," implying that choice was completely voluntary. This attitude may be a product of the long domination of market fundamentalism in the US, in which markets are seen as the solution to all social problems, so neither the outcomes of the "free market" or corporate management are to be questioned.

However, one would think that contemporary employed physicians are increasingly in a predicament, caught between their professional oaths to put individual patients first, and their generic manager bosses pushing to increase revenue no matter what. Yet for the corporate physician, protest might jeopardize their livelihood, or worse. Such physicians may feel captive of the restrictive clauses, such as confidentiality agreements and non-disparagement clauses, in the contracts they signed, possibly often under pressure and without adequate legal counsel. For example, a 2013 Medscape article was entitled, "Can you speak out without getting fired or being labeled a troublemaker?" The answer was at best, only sometimes.

Even in the limited coverage of the California student health doctors' strike, there were references to some of these issues. These included what could be mission-hostile management (shrinking visit times regardless of patient needs), and excess compensation to top management (particularly, the Chancellors' pay raises.) The anechoic nature of the strike, that is, the lack of media coverage so far, seems to reflect the now prevailing market fundamentalist dogma that is generally hostile to workers' rights and organization.

Nonetheless, the doctors of the University of California student health services did organize, and now they have taken the unheard of step of calling a strike. That this did not happen sooner is a testament to the enormous power, enforced by billions in public relations and marketing, of the dogma of market fundamentalism. However, given that most physicians are now employees, and have not been having an easy time of it, this strike may be just the beginning.

In any case, organization of employed workers, collective bargaining, and even strikes, while being anathema to market fundamentalists, may be much better for society than even more radical responses to the ongoing plight of workers. Remember, it was robber baron capitalism not much different from today's market fundamentalism, that inspired not only the rise of trade unions, but unfortunately, the rise of Marxism and ultimately Communism.

So maybe we should start looking for the "union label" more often in health care.

ADDENDUM (2 February, 2015) - See also post entitled, "Why Physicians Must Unionize" on the On Health Care Technology blog.

Today, we at the Centers for Medicare & Medicaid Services (CMS) are pleased to announce our intent to engage in rulemaking to update the Medicare and Medicaid Electronic Health Record (EHR) Incentive Programs beginning in 2015. These intended changes would help to reduce the reporting burden on providers, while supporting the long term goals of the program.

Read the document at the link above.

Note in particular this cheerful statement:

Since
the first year of the EHR Incentive Programs in 2011, the United States
has seen unprecedented growth in the adoption and meaningful use of
EHRs. To date, more than 400,000
eligible providers have joined the ranks of hospitals and professionals
that have adopted or are meaningfully using EHRs. This means that
millions of patients across the nationare
benefiting from the potential of better coordinated care among professionals, more accurate prescribing, and improved communication.

How does one, I ask, benefit from "potential of better care"?

How about the more factual "millions of patients are being put at risk
and actually being harmed by the non-potential, but in fact
actual, flaws in the technology?"

Until our leadership stops the mental cheerleading like this (or is it a form of subliminal messaging?), which
blinds the uninformed to the reality ... the situation with healthcare IT will not improve, in my opinion.

And this after a formal letter of complaint about health IT disruptions to care, dangers, etc. from these organizations:

American Medical Association
AMDA – The Society for Post-Acute and Long-Term Care Medicine
American Academy of Allergy, Asthma and Immunology
American Academy of Dermatology Association
American Academy of Facial Plastic
American Academy of Family Physicians
American Academy of Home Care Medicine American Academy of Neurology
American Academy of Ophthalmology
American Academy of Otolaryngology—Head and Neck Surgery
American Academy of Physical Medicine and Rehabilitation
American Association of Clinical Endocrinologists
American Association of Neurological Surgeons
American Association of Orthopaedic Surgeons
American College of Allergy, Asthma and Immunology
American College of Emergency Physicians
American College of Osteopathic Surgeons
American College of Physicians
American College of Surgeons
American Congress of Obstetricians and Gynecologists
American Osteopathic Association
American Society for Radiology and Oncology
American Society of Anesthesiologists
American Society of Cataract and Refractive Surgery and Reconstructive Surgery
American Society of Clinical Oncology
American Society of Nephrology
College of Healthcare Information Management Executives
Congress of Neurological Surgeons
Heart Rhythm Society
Joint Council on Allergy, Asthma and Immunology
Medical Group Management Association
National Association of Spine Specialists
Renal Physicians Association
Society for Cardiovascular Angiography and Interventions
Society for Vascular Surgery

-- SS

Addendum 1/30/15:

Also see my April 26, 2014 post "Followup to CMS does not have any information that supports or refutes claims that a broader adoption of EHRs can save lives" at http://hcrenewal.blogspot.com/2014/04/followup-to-cms-does-not-have-any.html with its attached March 2014 lettert from CMS. This document was obtained by the American Association of Physicians and Surgeons (AAPS) via FOIA on the "potential" benefits patients are realizing from the hundreds of billions of dollars spent on this technology to date:

CMS: "we do not have any information that supports or refutes claims
that a broader adoption of EHRs can save lives." [But millions of patients are already benefiting from the potential!] Click to enlarge.

Wednesday, January 28, 2015

... even when allegedly a prominent academic physician's traded referrals of cancer patients to a law firm, resulting in referral fees to a prominent politician who worked for the firm, for government research grants to the physician's foundation and another foundation on whose board he sat, and a job for his son at yet another non-profit organization.
***

Health care corruption,
remains a largely taboo topic, especially when it occurs in developed
countries like the US. Searching PubMed or major medical and health
care journals at best will reveal a few articles on health care
corruption, nearly all about corruption in less developed countries far away from where the authors live. When the media may
publish stories about issues related to health care corruption, they are
almost never labelled as such.

For example, last year we discussed two widely reported cases of alleged political corruption. One included allegations that a company producing a supposedly anti-inflammatory dietary supplement bribed Robert McDonnell, the former Governor of Virginia. Mr McDonnell was later convicted and sentenced to two years in jail for public corruption (look here). Another included allegations that Rick Perry, the former Governor of Texas abused his power by cutting funding of the state anti-corruption unit, which was investigating whether the Texas Cancer Research and Prevention Institute was awarding grants based on political influence rather than clinical and methodological merit. The reporting of both cases underplayed the health care aspects, and never mentioned health care corruption, or words to that effect.

Yet Transparency International's report on global health care corruption
suggested health care corruption occurs in all countries. A recent TI survey showed that
43% of US citizens believe the country has a health care corruption
problem (look here). Perhaps some US citizens have been reading between the lines, or have personal experiences with health care corruption. However, as long as we cannot talk about this problem openly, there is no chance it will be solved.

In January, 2015, a case of apparent political corruption made headlines. It turns out to also be a case of apparent health care corruption.

New York Assembly Speaker Sheldon Silver Charged with Fraud, Extortion, and Receiving Bribes

The federal corruption case against Assembly Speaker Sheldon Silver
rests in part on his alleged scheme with a doctor who referred asbestos
cases to the Weitz & Luxenberg law firm where Silver is of counsel.

A criminal complaint from U.S. Attorney Preet Bharara
alleges that Silver obtained referrals of asbestoscases from a doctor
affiliated with a university in Manhattan, referred to as 'Doctor-1,' by
using his position as speaker to quietly direct $500,000 in state funds
to the doctor's research and give 'additional benefits' to the doctor
and the doctor's family.

The Doctor-1 described in the criminal
complaint appears to be Dr. Robert Taub of Columbia University, based on
details outlined in the criminal complaint, and confirmed by a
secretary at his office and separately by a knowledgeable source. Taub
specializes in mesothelioma research, for which it is hard to find
research funding.

Regarding the advantages gained by Mr Silver,

Silver allegedly received millions of dollars in referral fees from
Weitz & Luxenberg, and was credited with referring more than 100
clients, many of whom were referred for asbestos cases, according to the
complaint.

The firm paid Silver $3.2 million for referrals
related to asbestos cases between 2003 and 2014, according to the
complaint. Prosecutors claim that several of those asbestos clients said
they had been referred to Doctor-1 for treatment, and said the doctor
had also recommended they retain Weitz & Luxenberg as their counsel.

Regarding the benefits to Dr Taub,

The complaints say the scheme began when the doctor allegedly asked
Silver if his firm would help fund mesothelioma research and Silver
declined. But prosecutors claim the doctor became aware that Silver
wanted him to refer asbestos patients to Silver and the law firm for
counsel, in exchange for funding for his medical research.

Doctor-1
started referring patients to Silver, and Silver began directing state
funding to the doctor's research, the complaint alleges.

In
December 2003, Doctor-1 requested a $250,000 grant from Silver to
establish a Mesothelioma center at a university, according to the
complaint. The complaint also says that the request was granted, and
Silver approved payment from a pool of discretionary funds paid for by
health care-related assessments that was under Silver's sole control
until the year 2007.

Silver later directed another grant from the same pool of funds, also worth $250,000, to the Mesothelioma Center.

In
2008, the speaker directed a further $25,000 discretionary member item
grant to a not-for-profit where the doctor was a board member, according
to the complaint.

In 2012, the complaint alleges that Doctor-1
asked Silver for help in finding a family member a job with a nonprofit
organization that 'received millions of dollars in member items and
capital funding from Silver.'

A New York Times article verified that "Doctor-1" was Dr Robert N Taub, a previously highly reputed academic.

In the criminal complaint against Sheldon Silver, he is identified simply as “Doctor-1.”

But Dr. Robert N. Taub, who headed a Columbia University center dedicated to curing a rare form of cancer caused by asbestos, is no ordinary doctor.

Also,

In 2002, Dr. Taub created one of the nation’s few mesothelioma research hubs, the Columbia University
Mesothelioma Center. He was also active in an organization that raised
money for research, sitting on the scientific advisory board of one of
the few nonprofits created to help victims, the Mesothelioma Applied
Research Foundation. The foundation, which awards research grants,
relies heavily on gifts from law firms.

Finally, the NY Times story identified Dr Taub's family member who got a job through Mr Silver's intervention,

According to the complaint and people briefed on the investigation, Dr.
Taub also asked Mr. Silver in 2012 to help his son, Jonathan, find a
job. The speaker arranged for an interview at OHEL Children’s Home and
Family Services, a social services organization based in Brooklyn that
had received millions of dollars in state funds from Mr. Silver.

After the allegations were made public, the NY Times also reported that Dr Taub "is leaving his position as head of a Columbia University cancer center, and the center is being disbanded," and the New York Post reported that Mr Silver is stepping down from his position as Speaker of the NY Assembly.

Political Corruption Highlighted, Health Care Corruption Ignored

Corruption as defined by Transparency International is abuse of
entrusted power for private gain. Thus TI does not limit the term to
cases involving politicians or government. Clearly, the allegations
above were for corruption in this sense, and that corruption involved
health care.

Furthermore, the alleged facts in the case implied,
- Dr Taub abused his patients' trust in him by directing them to Mr Silver's firm, whether or not that was the best choice for these patients
- Dr Taub abused the trust he inspired as a medical researcher by trading referral of his patients for government research grants
- Dr Taub personally profited from these arrangements by obtaining a job for his family member, and a grant for another (non medical research) foundation on whose board he sat.
- By directing grants to Dr Taub's research foundation, and the foundation on whose board Dr Taub sat, Mr Silver allocated scarce research funding for private gain, rather than for clinical, public health, or scientific reasons.

However, the coverage of the charges against Mr Silver, and particularly those relating to Dr Taub, was solely in terms of political corruption. While the media reported the facts related to health care, there was no mention of health care corruption.

Even the pithy op-ed on the case by Prof Zephyr Teachout, now widely known for her expertise in corruption, and for increasing awareness of the importance of corruption in modern US society, did not mention health care corruption. Her op-ed did note the earlier case of former Virginia Governor McDonnell,

As with the recent conviction of the former Virginia governor Bob
McDonnell for receiving improper gifts and loans, a fixation on plain
graft misses the more pernicious poison that has entered our system.

However, Professor Teachout did not note that these gifts and loans resulted from Governor McDonnell using his influence to market a supposed anti-inflammatory nutritional supplement.

Summary

Professor Teachout has decried how the definition of corruption has narrowed.

A fixation on plain graft misses the more pernicious poison that has entered our system.

However, our system is poisoned not only by political, but by health care corruption.

However, when health care corruption is clearly the issue, the news media will not use that term. Only when the corruption is occurring far away, usually in a supposedly benighted less developed country, will the news media or the scholarly medical, health care, and health policy literature discuss it as such. So the anechoic nature of health care corruption has not changed since my post of August, 2014.

If we are not willing to even talk about health care corruption, how will we ever challenge it?

So to repeat an ending to one of my previous posts on health care corruption.... if we really want to reform health care, in the little time we may have
before our health care bubble bursts, we will need to take strong action
against health care corruption. Such action will really disturb the
insiders within large health care organizations who have gotten rich
from their organizations' misbehavior, and thus taking such action will
require some courage. Yet such action cannot begin until we acknowledge and freely discuss the problem. The first step against health care corruption is to be able to say or write the words, health care corruption.

The "Meaningful Use" program for EHRs is a mismanaged boondoggle causing critical issues of patient safety, EHR usability, etc. to be sidestepped.

This is on top of the unregulated U.S. boondoggle which should probably be called "the National Programme for IT in the HHS" - in recognition of the now-defunct multi-billion-pound debacle known as the National Programme for IT in the NHS (NPfIT), see my Sept. 2011 post "NPfIT Programme goes PfffT" at http://hcrenewal.blogspot.com/2011/09/npfit-programme-going-pffft.html.

American Medical Association
AMDA – The Society for Post-Acute and Long-Term Care Medicine
American Academy of Allergy, Asthma and Immunology
American Academy of Dermatology Association
American Academy of Facial Plastic
American Academy of Family Physicians
American Academy of Home Care Medicine American Academy of Neurology
American Academy of Ophthalmology
American Academy of Otolaryngology—Head and Neck Surgery
American Academy of Physical Medicine and Rehabilitation
American Association of Clinical Endocrinologists
American Association of Neurological Surgeons
American Association of Orthopaedic Surgeons
American College of Allergy, Asthma and Immunology
American College of Emergency Physicians
American College of Osteopathic Surgeons
American College of Physicians
American College of Surgeons
American Congress of Obstetricians and Gynecologists
American Osteopathic Association
American Society for Radiology and Oncology
American Society of Anesthesiologists
American Society of Cataract and Refractive Surgery and Reconstructive Surgery
American Society of Clinical Oncology
American Society of Nephrology
College of Healthcare Information Management Executives
Congress of Neurological Surgeons
Heart Rhythm Society
Joint Council on Allergy, Asthma and Immunology
Medical Group Management Association
National Association of Spine Specialists
Renal Physicians Association
Society for Cardiovascular Angiography and Interventions
Society for Vascular Surgery

In the letter to Karen B. DeSalvo, National Coordinator for Health Information Technology at HHS, these organizations observe:

Dear Dr. DeSalvo:

The undersigned organizations are writing to elevate our concern about the current trajectory of the certification of electronic health records (EHRs). Among physicians there are documented challenges and growing frustration with the way EHRs are performing. Many physicians find these systems cumbersome, do not meet their workflow needs, decrease efficiency, and have limited, if any, interoperability.

Of course, my attitude is that we need basic operability before the wickedly difficult to accomplish and far less useful (to patients) interoperability.

... Most importantly, certified EHR technology (CEHRT) can present safety concerns for patients. We believe there is an urgent need to change the current certification program to better align end-to-end testing to focus on EHR usability, interoperability, and safety.

Let me state what they're saying more clearly:

"This technology in its present state is putting patients at risk, harming them, and even killing them, is making practice of medicine more difficult, is putting clinicians at liability risk, and the 'certification' program is a joke."

... We understand from discussions with the Office of the National Coordinator for Health Information Technology (ONC) that there is an interest in improving the current certification program. For the reasons outlined in detail below, we strongly recommend the following changes to EHR certification:

Patient Safety
Ensuring patient safety is a joint responsibility between the physician and technology vendor and requires appropriate safety measures at each stage of development and implementation.

I would argue that it's the technologists who have butted into clinical affairs with aid from their government friends, thus the brunt of the ill effects of bad health IT should fall on them. However, when technology-related medical misadventures occur, it's the physicians who get sued.

... While training is a key factor, the safe use of any tool originates from its inherent design and the iterative testing processes used to identify issues and safety concerns. Ultimately, physicians must have confidence in the devices used in their practices to manage patient care. Developers must also have the resources and necessary time to focus on developing safe, functional, and useable systems.

Right now, those design and testing processes compare to those in other mission-critical sectors employing IT quite poorly.

... Unfortunately, we believe the Meaningful Use (MU) certification requirements are contributing to EHR system problems, and we are worried about the downstream effects on patient safety.

In other words, computers and the government thirst for data do not have more rights than patients. In the current state of affairs, as I have observed prior, computers do seem to have more rights than patients and the clinicians who must increasingly use them.

... Physician informaticists and vendors have reported to us that MU certification has become the priority in health information technology (health IT) design at the expense of meeting physician customers’ needs, patient safety, and product innovation. We are also concerned with the lack of oversight ONC places on authorized testing and certification bodies (ATCB) for ensuring testing procedures and standards are adequate to secure and protect electronic patient information contained in EHRs.

Sadly, while on the right track regarding the problems of bad health IT, the societies take a Milquetoast approach to correction:

... In May 2014, stakeholders representing accredited certification bodies and testing laboratories (ACB & ATL), EHR vendors, physicians, and health care organizations provided feedback to ONC on the complexities of the current certification system. Two main takeaways from these comments were for ONC to host a multi-stakeholder Kaizen eventand to prioritize security, quality measures, and interoperability in the EHR certification criteria. We strongly support both of these ideas...

That's one recommendation I find disappointing. The industry plays hard politics, and organized medicine wants to play touchy-feely "good change" management mysticism with that industry and their government apparatchiks. That's how organized medicine wants patients and the integrity of the medical profession to be protected from the dysfunctional health IT ecosystem (see http://cci.drexel.edu/faculty/ssilverstein/cases/?loc=cases&sloc=ecosystem)?

When I originally created my old website called "Medical informatics and
leadership of clinical computing" back in 1998, Kaizen events were not
exactly what I had in mind.

Finally, the American Medical Informatics Association (http://www.amia.org) was apparently not informed of this letter, nor did it participate in its drafting. While this is regrettable, as the organization is the best reservoir of true Healthcare Informatics expertise, I opined to that group that this may have been due to the organization's tepid response to bad health IT and to industry control of the narrative, and the problems these issues have caused for physicians and other clinicians. The lack of AMIA leadership regarding bad health IT is an issue I've been pointing out since the late 1990s. AMIA has been largely a non-critical HIT promoter. That stance has contributed to the need for this multiple-medical specialty society letter in the first place.

Parenthetically, and for a touch of humor about an otherwise drab topic: Here's an example of how management mysticism plays out in pharma.

It's meant to be satirical, but captures reality all too well, in fact scarily so at times:

In pharma, as well as in hospital IT in my days as CMIO, gibberish like this was real. I imagine it's no different in many hospital management suites these days.

-- SS

1/28/2015 Addendum:

Per a colleague:

FierceHealthIT
(1/28) reports, “It’s time for the American Medical Association and
more than 30 other organizations urging change in the electronic health
record certification process to be part of the solution, former Deputy
National Coordinator for Health IT Jacob Reider
said in a blog post.” Reider said, “So far, I don’t see much [any?]
engagement from the AMA or the others who signed the letter. It’s
relatively easy to write a letter saying someone else is responsible for
solving problems. Time to step up to the plate and
participate in the solutions, folks!"

Regarding the victims of compelled use of bad health IT, this erstwhile health IT leader opines "It's relatively easy to write a letter saying someone else is responsible for solving problems?"

That is simply perverse.

I ask: why are we in the midst of a now-compelled national rollout with Medicare penalties for non-adopters when a former government official once responsible for the technology remarks that it's apparently not the makers' problem and that it's "time to step up to the plate and participate in the solutions, folks [a.k.a. end users]!"

(One wonders if Reider believes those who step up to the plate are entitled to fair compensation for their aid to an industry not exactly known for giving its products away, free.)

It seems to me it's not up to (forced) customers to find solutions to vendor product problems, some deadly.

It's the responsibility of the sellers.

Put more bluntly, Reider's statement is risible and insulting.

I've already opined the following to the AMA contact at the bottom of the letter:

... Relatively milquetoast approaches such as
multi-stakeholder Kaizens are not what I had in mind ... A more powerful
stance would be to advise society members to begin to avoid conversion,
report on bad health IT, and even boycott bad health IT
until substantive changes are realized in this industry.

That's "stepping up to the plate" to protect patients, in a very powerful way.

Wednesday, January 21, 2015

As we have frequently written, most recently last week, the hepatitis C screening and treatment bandwagon keeps rolling along.
There is constant public argument about the prices of treatment
regimens, which approach $100,000 per patient in the US. However,
nearly all the public chatter, which seems mostly to come from corporate
public relations people and marketers, investors and investment
advisers, physicians with financial conflicts of interest, and pundits
with little background in clinical epidemiology, seems never to question
the assumption that the new drugs for hepatitis C are miraculous cures,
which, of course, makes it hard to argue that they should not cost
royal amounts.

The Lack of Good Evidence for the New Hepatitis C Treatments

However, starting in March, 2014, we have posted
about the lack of good evidence from clinical research suggesting these
drugs are in fact so wondrous. The drugs are now touted as "cures," at
least by the drug companies, (look here),
and physicians are urged to do widespread screening to find patients
with asymptomatic hepatitis C so they can benefit from early, albeit
expensive treatment.

However, as we pointed out (e.g., here and here)
- The best evidence available suggests that most patients with
hepatitis C will not go on to have severe complications of the disease
(cirrhosis, liver failure, liver cancer), and hence could not benefit
much from treatment.
- There is no evidence from randomized controlled trials that treatment prevents most of these severe complications
- There is no clear evidence that "sustained virologic response,"
(SVR), the surrogate outcome measure promoted by the pharmaceutical
industry, means cure.
- While the new drugs are advertised as having fewer adverse effects
than older drugs, it is not clear that their benefits, whatever they may
be, outweigh their harms.

Furthermore, health care professionals and researchers with heftier
credentials in clinical epidemiology and evidence based medicine than
mine have since published similar concerns. These included
- a report from the German Institute for Quality and Efficiency in Health Care (the English summary is here)
- an article in JAMA from the Institute for Clinical and Economic Review (1)
- a report from the Center for Evidence-Based Policy (link here)
- an article in Prescrire International (2)

These publications and your humble scribe noted that the clinical trials
or other types of clinical research about new hepatitis C treatment
published in the most prominent journals had numerous methodologic
problems that all seemed likely to make the new drugs look better,
perhaps intentionally. (See posts here, here, and here.)

Yet the lack of evidence, and the discussion up to last week of this lack of evidence, was mostly anechoic. The public argument continued to be based on the assumption that new treatments of hepatitis C are miraculous.

The BMJ Elicits An Interesting Response

Last week the British Medical Journal provided the first opportunity for a large audience to be exposed to skepticism about the hepatitis C bandwagon. As we discussed here, the article by Koretz et al(3) based an affirmation of the four points above on a critical examination of the evidence.

The article, and even our blog post
about it, seem less anechoic than the previous articles and blog posts
mentioned above. At least a few commentators were inspired to a defense
of the currently received wisdom. However, in my humble opinion, the commentators
mainly succeeded in demonstrating how received wisdom is often supported
by illogic.

Defending the Received Wisdom with Logical Fallacies - Analysis of an Anonymous Comment

Let me start with examples derived from dissecting the arguments of the first anonymous comments we received on our blog post.

Examples of the Straw Man Fallacy

The commentators arguments included,

The article suggests that the INF+RBV therapy is just as good as Harvoni,

Note that whether by "the article" the commentator meant the article by Koretz et al,(3) or the blog post on Health Care Renewal was not clear. In any case, neither made a statement to that effect. Incidentally, I am not aware of any trial that directly compared Harvoni to some combination of interferon and ribavirin.

Both Koretz et al and I did refer to the ONLY trial in which one of the
new antiviral drugs (sofosbuvir) was directly compared to peg-interferon
and ribavirin.(4) I discussed that
trial in detail here (
http://hcrenewal.blogspot.com/2014/04/knee-deep-in-hoopla-triumph-of-medical.html)
It showed no significant difference between the sustained viral
responses at 12 weeks produced the two regimens. As far as I can tell,
there is NO evidence from any controlled trial that the new drugs are
more effective than the old drugs.

So the commentator's argument was based on a misstatement of either Koretz and colleagues' or my argument. In any case, it is therefore an example of a logical fallacy, the straw man fallacy. The commentator was not arguing with something we wrote, but rather a straw man assertion which the commentator constructed.

The commentator also said,

the claim that INF+RBV causes adverse effects in less than 1% of treated is just false,

Again, neither Koretz et al nor I wrote that. So this began another argument based on the straw man logical fallacy.

Koretz et al and I again referred to data from the Lawitz et al controlled trial. That trial did suggest that the new drug produced more, not less severe adverse effects than the old drug.

The Red Herring Fallacy

The commentator wrote,

The statement that most patients will not go on to severe liver damage/liver cancer is unproven.

Presumably, this meant most patients with untreated hepatitis C will not go on to severe liver disease/ cancer. This, however, is a statement about the natural history of a disease. How a statement about disease prognosis could be "proven," however, is not clear. It is not ethically easy, or perhaps possible, to do an experiment to prove the natural history of disease. Our knowledge of prognosis therefore relies on observational studies. While such studies can show association, they cannot prove causation. So it is true that the prognosis of hepatitis C is unproven, but in practical terms it cannot be proven, or unproven. While the commentator implied that longer term studies would show that patients have very bad outcomes, but no one knows that with certainty. Thus, the assertion seems to be an example of a red herring, bringing up an irrelevant point to distract from the issue.

Appeal to Authority

The commentator wrote,

SVR12 is a commonly accepted evidence for complete eradication of the virus

So the argument was that some people, perhaps, as was said at the conclusion of “Raiders of the Lost Ark,” top men believe that SVR means complete cure.

Why anyone believes that SVR12 means cure, and particularly whether this belief is based on evidence and logic was not explained. Just because some people, even top men, believe it does not mean it is true. Thus this assertion is an example of another logical fallacy, an appeal to authority. By the way, there are plenty of people, including Koretz et al, who do not believe this.

ADDENDUM (27 January, 2015) - I have now independently verified that the comments made on our blog by "anonymous" were made by a patient, and were made honestly, not cynically. Furthermore, English is not the patient's first language, so he or she may have used English words such as "unproven" and "commonly accepted" somewhat differently than I understood.

More Logical Fallacies in the BMJ Rapid Responses

Similarly, the article by Koretz et al has generated a few rapid responses which contain their own share of logical fallacies. Some examples follow from comments through January 19, 2015.

Begging the Question and the Burden of Proof Fallacy

In the January 15, 2015 comments by Donna R Cryer

[The article by Koretz et al] severely undervalues the harms, to the individual and society, of active
HCV infection. Reduction or avoidance of end stage liver disease or
death are not the only appropriate measures of value of screening or the
effectiveness of new medications.

Ms Cryer did not state what the values of the harms are, nor what the other appropriate measures might be, and provided no evidence for either assertion. So this boils down to, "you are wrong and I am right." More formally, this could be an example of begging the question, that is, an argument - in this case that screening is warranted - simply based on assumptions without explanation or supporting evidence. On the other hand, this could also be an argument of the burden of proof fallacy. Ms Cryer implies that Koretz et al must prove their conclusions, while she simply needs to assert hers.

Appeal to Fear

Again from Cryer,

To propose that widespread birth cohort screening efforts be undermined
is a disservice to every individual living, unknowingly, with the
silently devastating disease that is hepatitis C.

Note that this sentence again appears to include begging the question, with the assertion that hepatitis C is "silently devastating," without explanation or supporting evidence, and the burden of proof fallacy, since it implicitly rejected Koretz and colleagues' argument that hepatitis C is not devastating to all patients, which was based on at least some evidence, without supplying any evidence that it is devastating. Furthermore, this has an element of an appeal to fear in its use of the emotionally loaded word, "devastating." Note that Koretz et al instead talked about specific complications of hepatitis C.

The author did not explain why these improvements will occur. This could be another example of begging the question. On the other hand, it also could be wishful thinking, which at least some people consider a logical fallacy as well as a cognitive bias. Obviously, it would be nice for the newer treatments to achieve better results at lower prices in the future, but the future is not so predictable.

An even more explicit example of wishful thinking, alsoby Selvapatt, was,

The hope would be that ... [screening] would serve to reduce the economic and
healthcare pressures associated with end stage liver disease caused by
hepatitis C.

That would be the hope, certainly, but should the decision to screen be based on hope, or on evidence and logic.

Appeal to Authority

In the January 19, 2015, comments by Padmanabhan Badrinath

Regarding side effects Koretz et al state 'However, in a trial of
sofosbuvir versus peginterferon plus ribavirin, 3% of participants
taking sofosbuvir experienced serious adverse events compared with 1% in
the peginterferon plus ribavirin arm (difference not significant)'.
According to NICE 'Evidence Review Group (ERG) was satisfied that the
evidence showed that treatment with sofosbuvir-based regimens was
generally well tolerated and led to fewer adverse events than treatment
with peginterferon alfa and ribavirin'.

Note that Koretz et al provided data, and again, that from the only clinical trial that compared a new drug (sofosbuvir) to an old drug, peg-interferon. However, Badrinath contrasted that evidence with conclusions from the NICE report that were about apparently any, rather than just severe adverse events, and Badrinath did not provide any justification of or evidence supporting these conclusions. While NICE is admittedly often considered to be pretty authoritative, simply stating its conclusions in the absence of evidence to refute Koretz's presentation of evidence amounts to an appeal to authority.

Summary

So it appears that the BMJ article on hepatitis C rendered the skepticism about the miraculous qualities of the innovative new antiviral drugs for hepatitis C less anechoic. However, the response to these echoes seems to have been enriched with illogic.

So it goes in the brave new world of health care. In the current money driven system, new "innovations" touted as miraculous constantly appear. When a few skeptics question the evidence or logic supporting these claims, these doubts usually start as anechoic. If the doubts are more widely expressed, the first line of defense seems to be often based on logical fallacies. We most recently saw such fallacies deployed defending another drug, sacubitril, touted as miraculous from annoying skeptics.

Health care professionals, health care policy makers, and the public at large should not be swayed by illogic. Our continuing series about how logical fallacies are used to support
the status quo and the powers that be in health care suggests, if
nothing else, that health care professional education ought to include
courses in logic.

Monday, January 19, 2015

On this day, the US celebrates the legacy of the Rev Martin Luther King Jr.

Martin
Luther King Jr once famously addressed the question of how long it
would take to achieve some measure of real equality in the US (in the
"Our God is Marching on Speech.") He stated,

the arc of the moral universe is long, but it bends
towards justice.

In context, he clearly meant that such bending was
possible when people devoted hard work and concerted action toward this
end. Rev King was hardly one to sit back and passively expect good
things to happen. However, as pointed out in the Huffington Post entry by Christ Weigant, this sentence has often been taken out of context to justify
passivity, and argue that we need not discomfit ourselves too much to
achieve justice.

I have heard it used that way in the health care
sphere, to justify collaboration with industry in areas where
management's typical thrust to achieve quick revenue may lead to
interests very different from those of medical professionals. (We have posted frequently about conflicts of interest, and institutional conflicts of interest in health care, and how justification for such "collaboration" is often based on logical fallacies.)

So
on this day, I urge you to think about how hard it may be to make
health care more just, but how necessary it is to push on regardless.

Thursday, January 15, 2015

As we wrote, most recently last week, the hepatitis C screening and treatment bandwagon keeps rolling along. There is constant public argument about the prices of treatment regimens, which approach $100,000 per patient in the US. However, nearly all the public chatter, which seems mostly to come from corporate public relations people and marketers, investors and investment advisers, physicians with financial conflicts of interest, and pundits with little background in clinical epidemiology, seems never to question the assumption that the new drugs for hepatitis C are miraculous cures, which, of course, makes it hard to argue that they should not cost royal amounts.

The Lack of Good Evidence for the New Hepatitis C Treatments

However, starting in March, 2014, we have posted about the lack of good evidence from clinical research suggesting these drugs are in fact so wondrous. The drugs are now touted as "cures," at least by the drug companies, (look here), and physicians are urged to do widespread screening to find patients with asymptomatic hepatitis C so they can benefit from early, albeit expensive treatment.

However, as we pointed out (e.g., here and here)
- The best evidence available suggests that most patients with hepatitis C will not go on to have severe complications of the disease (cirrhosis, liver failure, liver cancer), and hence could not benefit much from treatment.
- There is no evidence from randomized controlled trials that treatment prevents most of these severe complications
- There is no clear evidence that "sustained virologic response," (SVR), the surrogate outcome measure promoted by the pharmaceutical industry, means cure.
- While the new drugs are advertised as having fewer adverse effects than older drugs, it is not clear that their benefits, whatever they may be, outweigh their harms.

Furthermore, health care professionals and researchers with heftier credentials in clinical epidemiology and evidence based medicine than mine have since published similar concerns. These included
- a report from the German Institute for Quality and Efficiency in Health Care (the English summary is here)
- an article in JAMA from the Institute for Clinical and Economic Review (1)
- a report from the Center for Evidence-Based Policy (link here)
- an article in Prescrire International (2)

These publications and your humble scribe noted that the clinical trials
or other types of clinical research about new hepatitis C treatment
published in the most prominent journals had numerous methodologic
problems that all seemed likely to make the new drugs look better,
perhaps intentionally. (See posts here, here, and here.)

The British Medical Journal Publishes a Skeptical Review of Hepatitis C Screening

Now an article in the British Medical Journal again raises questions about whether the emperor of hepatitis C treatment has some missing garments.(3) To date, this article has received minimal attention from large media outlets. I could only find stories in Bloomberg, and by the San Francisco Chronicle to date.

The article by Koretz et al focused on the evidence, or lack thereof in favor of screening for hepatitis C, but affirmed the following points

Most Patients with Hepatitis C Will Not Go On to Have Severe Complications of the Disease

To wit,

At least 2.7 million people are infected with hepatitis C virus in the US, and around 16 000 people each year die or have liver transplantations because of the disease. This suggests that less than 0.6% of infected patients will die of liver disease or be transplanted each year.

Also,

Retrospective studies of the natural course of hepatitis suggest that end stage liver disease is common and that it takes about 20 years to develop cirrhosis and 30 years to develop liver cancer. However, such series are usually composed of people who have a medical problem and are thus a sicker subpopulation of the people with chronic hepatitis C infection (referral bias). Furthermore, the total number of infected patients from which they are drawn is unknown.

Finally,

The risk of developing end stage liver disease is low for the first three decades of infection. Unfortunately, data on the risk beyond that point are limited. Only three studies provide data beyond 30 years, and the data are for children and women (both groups perhaps being at lower risk of progression) and for men in whom it was not clearly proved that the infections were chronic when diagnosed. Nonetheless, these data are consistent with previously cited epidemiological data from the general population, and it is likely that 80-85% of patients with chronic hepatitis C will die from non-hepatic causes

There is No Evidence from Randomized Controlled Trials that Treatment Prevents Most of these Complications

The most convincing way to establish efficacy of treatment is through well designed and conducted randomised, placebo controlled trials using clinical outcomes (morbidity and mortality). However, such trials are available only for interferon monotherapy. Ten randomised trials of interferon alfa have been conducted in patients with severe fibrosis or cirrhosis. The results were disappointing, even though at the time, expert opinion advocated interferon treatment for these patients.

There is No Clear Evidence that SVR Means Cure

Sustained virological response is not a cure. Viral RNA is sometimes found in body tissues even when the serum is clear; in some studies this has been found frequently. The virus also reappears in some patients with sustained response, and though this might be thought to be due to reinfection, at least sometimes these events represent the reappearance of the same virus. Moreover, a few patients with a sustained response develop end stage liver disease. In the largest observational study to assess this risk, 1001 patients with severe fibrosis (84% with cirrhosis) with sustained virological response were followed for up to eight years. During that time, 50 developed hepatocellular carcinomas, a 1% annual risk. Observational studies have suggested that the annual incidence of hepatocellular carcinoma in people with compensated cirrhosis secondary to hepatitis C infection is 1.4-3.3%.

There is No Evidence that the Benefits of Treatment Outweigh Its Harms

Claims of increased safety or tolerability of the newer treatment have been based on fewer and less severe side effects. However, the new drugs can still cause serious adverse events (resulting in persistent disability, hospital admission, or death).

Also,

Safety data are limited for the newest drugs. However, in a trial of sofosbuvir versus peginterferon plus ribavirin, 3% of participants taking sofosbuvir experienced serious adverse events compared with 1% in the peginterferon plus ribavirin arm (difference not significant). Combination therapy with sofosbuvir plus ledipasvir with or without ribavirin, was associated with a 0.5-2% rate of serious adverse events. According to a recent analysis of US Food and Drug Administration data, over one year telaprevir accounted for the single greatest number of reported severe and fatal skin reactions of any drug monitored. Unfortunately, we cannot weigh the risk versus the benefit at this time because we have no data on the precise benefit (if any).

Summary

Koretz et al supplied these conclusions:

If the treatment of hepatitis C is to be scaled up to cover a large portion of the 125-150 million infected people worldwide, regulatory agencies should ensure that drugs have been evaluated by long term follow-up of clinical outcomes (not just surrogate markers) in several thousands of patients. The financial cost of treatments have been discussed elsewhere, but given the uncertainty about the validity of the surrogate markers, the lack of evidence regarding clinical outcomes of treatment or of screening strategies, and the adverse events caused by the newer regimens, screening may be premature.

By the same logic, it is not clear that treatment of asymptomatic patients found to have hepatitis C provides benefits that outweigh its harms.

Thus, more authoritative voices are saying that the hepatitis C treatment emperor is seriously fashion challenged.

If there is no good evidence that these drugs do more good than harm for asymptomatic patients, why should physicians prescribe them for these patients? If use of these drugs in general has not been shown to do more good than harm, why should they be prescribed for any but the most desperate patients? Finally, if these drugs have not been shown to do more good than harm, and the lack of evidence is clearly the responsibility of the drugs' manufacturers who chose not to do very large and/or long-term randomized controlled trials and not to assess clinical outcomes, what justification is there for the gargantuan prices of these drugs?

A larger societal question is why the public discussion has been so dominated by enthusiasts for these drugs, and so little informed by the existing evidence, or lack thereof, from clinical research?

To repeat,.. the Sovaldi (and now Harvoni, Viekira Pak, etc) case is a signal example of how our health care system is
awash in marketing hype and public relations buzz that has swamped
rational skeptical thinking about logic and evidence. That marketing
and PR is ever enriching managers while it will send the rest of us,
health care professionals included, to the poor house. And all the
money we spend will likely not buy us the promised miracles and triumphs.

It is disappointing that so many physicians and other health
professionals have been caught up in this hype and spin, probably
abetted by their wishful thinking about cures of hepatitis C, and
perhaps also abetted by financial conflicts of interest. Yet to protect
the best interests of their patients, they should be rigorously
skeptical of illogical or evidence-free arguments made to further vested
financial interests.

As we have said until blue in the face, true health care reform would
bring some skeptical thinking and regard for evidence and logic into the
health policy discussion.

ADDENDUM (19 January, 2015) - See also comments in the HealthNewsReview.org blog.

ADDENDUM (22 January, 2015) - See an analysis of logical fallacies found in comments arguing with this post, and employed by authors of rapid responses to the Kortetz et al article in the BMJ, in this post.

Tuesday, January 13, 2015

We are just into January and have our first legal settlement by a major health care corporation of charges of giving physicians kickbacks to spur use of a commercial product. Like most such stories, this one got little notice. The most extensive report was in Ed Silverman's PharmaLot blog on the Wall Street Journal site.

The Summary and Allegations

The basic summary...

Daiichi Sankyo agreed to pay $39 million to the U.S. federal government and state Medicaid programs to settle allegations of paying kickbacks to physicians to prescribe several of its drugs.

The allegations were ...

that Daiichi initiated different speaker programs and paid doctors kickbacks – in the form of honoraria and meals, among other things – that were labeled as speaking fees between 2004 and 2011. The speaker programs, however, were problematic, according to the U.S. Department of Justice.

How so? The feds allege that some physicians spoke only to his or her own office staff; the audience sometimes included the physician’s spouse; payments were made to physicians even when participants took turns 'speaking' about duplicative topics at dinners paid for by the drug maker; and the dinners were lavish and, sometimes, exceeded internal Daiichi cost limitations of $140 a person, according to the settlement agreement.

Note that the defenders of physician - industry "collaboration" often defend payments such as speaking fees as necessary "conflicts of interest" to encourage health care "innovation." Innovation does not seem the right word for the conduct in this case, and the payments seem to be more than just "conflicts of interest." Nonetheless the defenders often argue that at best, such "conflicts of interest" only need to be disclosed, not limited.

The drugs whose prescription were allegedly being encouraged by the kickbacks were...

the Welchol cholesterol-lowering medication and the Benicar, Azor and Tribenzor high blood pressure pills

which stipulates that the drug maker must implement compliance programs to prevent such illegal practices from occurring in the future.

It did not apparently include any obligation for the company to admit wrongdoing, much less plead guilty to anything. Instead, a company executive offered the de rigeur statement...

Ken Keller, who heads Daiichi Sankyo commercial operations in the U.S., says 'we are pleased to have finalized these agreements and remain focused on our core mission of helping people live healthy and meaningful lives. We are committed to being an ethical, trusted and respected company, and constantly improving how we operate is part of our culture.'

The irony induced by juxtaposing the present tense "we are committed to being... ethical" and the substance of the charges was apparently lost on Mr Keller.

Finally, no individual who authorized, directed, or provided the kickbacks apparently suffered any negative consequences, much less fines or other legal sanctions.

Summary and Comments

Here comes the New Year, just like the old year. I have lost count of how many posts we have published about legal settlements of cases in which drug, biotechnology, or device companies were alleged to have given physicians kickbacks to prescribe, use or implant their products.

Such kickbacks are obviously unethical, and fit the Transparency International definition of corruption, "abuse of entrusted power for private gain." Physicians are entrusted to make decisions on behalf of patients in the patients' best interests, not for the sake of payments from commercial firms.

Nonetheless, as in the cases of legal settlements of other charges involving other kinds of unethical behavior by big health care organizations, the consequences for these organizations seem to be slaps on the wrist with wet noodles. Although the fines meted out may seem big to regular folk whose income has been stagnant for years, they are usually small compared to the organizations' revenues. In any case, the fines are paid out of general corporate funds, and so ultimately by stockholders, employees, and perhaps customers, clients, or patients who had nothing to do with the kickbacks. On the other hand, those who actually profited from the kickbacks usually walk away with no consequences. Thus it seems unlikely that these sorts of fines in the absence of penalties assessed against individuals deter future bad behavior. We have discussed these problems frequently in our posts on legal settlements.

The corporate integrity and/or deferred prosecution agreements deserve a bit more comment at this juncture. They only seem to ask the company to refrain in the future from doing anything really nasty, but rarely incorporate serious scrutiny or any meaningful consequences should the company do something nasty.

In fact, the pioneering use of these agreements by current New Jersey Governor Chris Christie when he was a US Attorney lead to charges that they were a form of "shakedown," rather than justice, and could be used to do favors for political cronies installed as the monitors for the agreement. A 2014 article in the New York Observer provided examples of health care related settlements authored by Mr Chistie,

In 2007, the Star-Ledger broke the news that John Ashcroft, the former attorney general who had been Mr. Christie’s boss at the DOJ, received a '$52 million payday' for serving as an outside monitor to medical device company Zimmer Holdings. [See our summary of the Zimmer case including this deferred prosecution agreement here.] Another DPA led to Bristol-Myers Squibb agreeing to spend $5 million to fund a business ethics program at Seton Hall University, where Mr. Christie had attended law school. [See our 2005 summary of the Bristol-Myers-Squibb case involving this deferred prosecution agreement here.] And then there was the mother of all eyebrow-raising DPA paydays.

When the University of Medicine and Dentistry of New Jersey, one of the largest medical schools in the country, was revealed in 2005 to be a veritable parking garage for politically connected no-show jobs, Mr. Christie tapped an old friend, mentor and predecessor, former New Jersey U.S. Attorney Herb Stern, to serve as the school’s federal monitor. [We posted extensively on the UMDNJ case here.] Mr. Stern is a giant in New Jersey legal circles—he is the subject of the book Tiger In the Court—but his fees after his return to private practice had raised eyebrows. The former CEO of Qwest, Joseph Nacchio, alleged that Mr. Stern wildly overbilled him for 'duplicative and unnecessary work,' including sending seven attorneys to attend a court appearance and even charging thousands for staff breakfasts, in-room movies and underwear. According to The New York Times, Mr. Stern’s firm 'ultimately billed the state for more than $10 million.' A couple of days after Mr. Stern landed the contract, Mr. Christie hired Samuel Stern, the son of Herb Stern, despite what were reported by The Star-Ledger to be 'objections from nearly every assistant U.S. attorney who interviewed him.' A couple days after that, Mr. Christie announced his own resignation as U.S. attorney.

Note further that most of these legal settlements seem uninformed by any previous bad behavior of the organization or the people involved. Many of the organizations subject to these settlements have already made previous settlements, sometimes many of them. Some of them have already signed corporate integrity or deferred prosecution agreements. Relevant to the current case, Daiichi Sankyo's Ranbaxy subsidiary paid a $500 million settlement for selling adulterated products in 2013 (see our blog post here).

Finally, note that the settlements made by large health care corporations often seem effete compared to those imposed on smaller organizations or individuals. Some recent examples appear in blog posts here and here. In fact, the US Attorney responsible for the current Daiichi Sankyo settlement is Ms Carmen Ortiz. In 2014, Ms Ortiz was responsible for the little ($6 million) Biomet settlement above, constructed without regard to several larger settlements made by the same company. In fact, we had posted that Ms Ortiz was involved in settling three seemingly big previous cases, involving
allegations that Forest Pharmaceuticals promoted Celexa in adolescents
despite the drug's likely dangers to them, GlaxoSmithKline used
misleading drug packaging, also likely endangering patients, and St Jude
Medical gave kickbacks to doctors to induce them to implant medical
devices. All cases were settled with fines, but again no individuals
suffered any negative consequences. However, in contrast, Ms Ortiz was
also the prosecutor who proved how tough she was when she threatened
activist Aaron Swartz with serious prison time for alleged computer
fraud, driving Mr Swartz to suicide.

So, quelle surprise, the Kabuki play that is regulation of and law enforcement for large
health care organizations goes on. As our society is being increasingly
divided into a huge majority in increasingly difficult economic
circumstances and a small and increasingly rich minority, it also seems
to be increasingly divided into little people who may be ruined by
lawsuits, and imprisoned for even minor infractions, and big people who
have impunity.

True health care reform would hold leaders of health care organizations
accountable for their organizations' behavior, and its effects on
patients and health care professionals.

For a more humorous take on Mr Christie's career, see this performance by Jimmy Fallon and Bruce Springsteen, "Governor Christie Traffic Jam" -

Thursday, January 08, 2015

The theme of non-profit hospital CEO as Scrooge seems to be persisting in the media even beyond the holiday season. (Our last post on this theme was in December, 2014). The previous cases we discussed (also here) involved marked contrasts between how well top hired managers of non-profit hospitals were doing, and how their institutions were doing.

Turning Around the Hospital, but Turning Away Employees

The background to this story comes from an article in the Cape Cod (MA) Times from January, 2014. Cape Cod Healthcare, a regional non-profit hospital system, hired Dr Richard Saluzzo as CEO to turn around the system's troubled finances.

'We were really in trouble. He was the architect and foundation of turning that around,' Wroe said.

In this case, the turn around seemed to be strictly financial,

During his tenure Cape Cod Healthcare's bond rating improved from one grade above junk status to BBB with a favorable outlook.

However, the turn around also involved turning away employees,

The financial turnaround came in part from cost-cutting measures such as layoffs for about 200 employees and improved billing.

More details about these layoffs were in a Cape Cod Times article from 2008,

A hospital chaplain and several psychiatric nurses are among the cuts
emerging from Cape Cod Healthcare's announcement last month that it is
eliminating 169 positions.

In particular,

the hospital's largest union is expected to begin the
process of 'bumping' later this week, which allows employees with more
years of service to move into jobs of junior colleagues.

Most of the layoffs announced last month are at Cape Cod Hospital.

Union jobs scheduled for elimination are going through a process of negotiation with management.

Seventy-six positions held by members of the 1199SEIU United Healthcare Workers East are slated for elimination.

Also
still in negotiation is the fate of seven members of the Massachusetts
Nurses Association, several of whom are employees of the psychiatric
center located across the parking lot from Cape Cod Hospital in Hyannis.

Some of the nurses work part time, said Marilyn Rouette, president of the Cape Cod Hospital chapter of the association.

But the psychiatric services help 'a very vulnerable population,' she said.

So the hospital apparently did improve its financial performance during the reign of Dr Saluzzo, but at the expense of quite a few employees, including health professionals serving vulnerable patients.

CEO Compensation as the Gift that Keeps on Giving

CEO Dr Saluzzo earned pretty good pay during his last full year, as reported by the Cape Cod Times in 2014,

In fiscal 2010 — his last full year of employment at Cape Cod Healthcare
— Salluzzo earned under $1 million, garnering $835,609 in salary and
$23,967 in other compensation. He also received a benefit plan worth
$78,618.

He did much better than did the previous CEO,

Salluzzo's most recent salary stands in striking contrast to that of his
predecessor, retired Cape Cod Healthcare CEO Stephen Abbott, whose
salary came to $621,225 in fiscal 2008, his last full year on the job.
That year he also had a benefit plan worth $111,544.

However, CEO Dr Saluzzo's compensation did not stop when he left. The 2014 article in the Cape Cod Times included,

Even as Dr. Richard F. Salluzzo abruptly left his CEO
position at Cape Cod Healthcare more than three years ago, he was due to
receive more than $2 million in compensation.

Reports
filed with the state attorney general's office for fiscal 2012 and 2011
show that Salluzzo remained Cape Cod Healthcare's highest-paid employee
those years, despite the fact that he left just two months into fiscal
2011.

Three
years after he abruptly left Cape Cod Healthcare, former CEO Dr.
Richard Salluzzo continued to be one of its highest-paid employees,
according to new financial reports filed with the state attorney
general’s office.

Since departing the
nonprofit organization in November 2010, Salluzzo has taken in more than
$3 million in compensation, including $857,953 for the most recent
fiscal year on file, 2013.

The compensation
made Salluzzo the fourth-highest-paid employee at Cape Cod Healthcare
for that period, which started Oct. 1, 2012, according to forms recently
filed with the attorney general’s nonprofit/public charities division.
The payout is less than what Salluzzo earned in fiscal years 2011 and 2012, which came to $1,309,308 and $1,095,342.

The Board Continues its Defense of the Seemingly Endless CEO Compensation

According to the 2015 Cape Cod Times article, the new board chairman continued the defense of the continuing payment of a CEO who departed over three years ago,

This was a commitment made by the board years ago,' said William Zammer, chairman of the Cape Cod Healthcare Board of Trustees. 'The system was hemorrhaging money, and we were in a terrible position.'

'Salluzzo came onboard and did the job' of shifting the health care system from the red to the black,' Zammer said.

Never Mind the Questions Raised about the CEO Since 2008

This defense, admittedly not as strident as some other defenses by hospital board members of CEO compensation that we have discussed, was maintained despite some pretty significant questions about former CEO Dr Saluzzo since he was hired back in 2008.

Dr Saluzzo's Leadership of Wellmont Health System

This concern goes all the way back to 2009, as reported again by the Cape Cod Times,

Amid the good news, however, comes word from the Wellmont Health System in Kingsport, Tenn., that profits under Salluzzo were significantly less than first reported. A recent audit by a new firm found the system overstated its net earnings for fiscal years 2006 and 2007 by nearly $20 million and lost $4.6 million in 2008. The financial restatement came as a shock to Salluzzo, who said audits during his tenure always came back clean.

'This is a disagreement between auditors,' he said. 'I know my team and I did nothing wrong.'

Wellmont officials, who have not returned phone calls, said in a prepared statement that the audit turned up no evidence of criminal acts. The press release referred to errors in recording expenses, receivables and assets and said the system was imposing a new set of controls to reconcile accounts and strengthen internal auditing.

At that time, the board of Cape Cod Healthcare just seemed relieved that the issue was not criminal,

'There's no indication of fraud, manipulation of funds or personal gain,' [board chairman Thomas Wroe] ... said. 'They changed auditors. Any time you do that, you have a different translation of financial results. We have strong confidence in Dr. Salluzzo. He's been doing a great job for us.'

Saying that there is no indication that a person is a criminal seems like rather faint praise. Never mind that it was still on CEO Dr Saluzzo's watch that these results, which now appear less than stellar, were produced, and that the belief, not apparently wrong, that CEO Dr Saluzzo produced stellar results at Wellmont was a reason to hire him as CEO of Cape Cod Healthcare. Never mind that it was on CEO Dr Saluzzo's watch that the Wellmont hospital systems accounting was full of errors, yet it was Dr Saluzzo's financial leadership at Wellmont that apparently endeared him to the Cape Cod board.

Dr Saluzzo Sanctioned by the Massachusetts State Medical Board

In 2011, after Dr Saluzzo left his position as CEO, the Falmouth (MA) Enterprise reported,

Dr. Richard F. Salluzzo, former CEO of Cape Cod Healthcare, was
disciplined by the state Board of Registration in Medicine this week for
using drugs prescribed to others for his own use and prescribing drugs
to family members without keeping proper records.

In particular,

Among the allegations in the board’s investigation of Dr. Salluzzo
are that in 2008, before he started at Cape Cod Healthcare, he wrote
four prescriptions for Valium for an employee working under him and then
asked the employee to fill the prescriptions and give him the drugs. In
2009, while holding the top job at Cape Cod Healthcare, he wrote
prescriptions for Zoloft for a friend and filled the prescriptions for
his own use.

According to the board’s allegations, he also wrote prescriptions for
controlled substances for his wife, his two adult children and his
father but did not keep medical records for the family members.

In disciplining Dr. Salluzzo for those actions, the board cites the
American Medical Association’s Code of Medical Ethics that 'physicians
should not treat themselves or family members as professional
objectivity may be compromised and issues of patient autonomy and
informed consent may arise.'

In a consent order, Dr. Salluzzo agreed to the ruling and punishment, signing the document on November 1.

At that time, the Cape Cod Healthcare board of trustees responded to the disciplinary measures taken for unprofessional actions by the system's former CEO thus,

Cape Cod Healthcare’s board of directors, in a press release, stated, 'We became aware of a complaint and followed our established policies
to ensure that the licensing board was involved in this matter on a
timely basis. We then cooperated fully with the Board of Medicine’s
investigation.'

The board notes that the Board of Medicine discipline concerns Dr.
Salluzzo’s private practice and not his management performance.

'No complaint was ever reported or filed by any patients or
physicians here regarding the quality of the clinical care provided by
Dr. Salluzzo during his tenure on the medical staff of both CCHC
hospitals,' according to the statement.

The board reiterated its statement last year about Dr. Salluzzo’s
tenure at the hospital. 'He achieved the goals set for him as witnessed
by our financial turnaround and improved relationships with our
physicians, then decided to pursue other career challenges and
professional interests.'

On the basis of the Massachusetts disciplinary actions, Salluzzo also
was fined and reprimanded in 2012 by medical boards in New York,
Tennessee and Pennsylvania — all states where he has practiced medicine
in the past.

I would guess that this means that actions uncovered by the Massachusetts board of medicine included some that took place in these other states.

The real issue raised was not whether Dr Salluzzo's professional actions harmed patients, but whether a physician so sanctioned for unprofessional conduct deserved continuing payments, amounting to millions of dollars, for his previous employment as CEO of Cape Cod Healthcare.

The usual justification for extremely high compensation of hired health care managers is their brilliance. Recall that in 2014, well after CEO Dr Saluzzo departed from Cape Cod Healthcare, then chairman of the board of trustees Thomas Wroe gave him accolades for "quality of care." It seems that one could question the quality of care produced by the leadership of a physician who wrote used subterfuges to obtain controlled substances for himself and his family. Such questions did not occur to the former chair of the system's board of trustees even by 2014.

Summary

Note that the 2014 Cape Cod Times article quoted W. Michael Hoffman, executive director of the Center for Business Ethics at Bentley University, who called CEO Dr Saluzzo's cumulative compensation "outrageously lucrative." The 2015 Cape Cod Times article quoted David
Schildmeier, spokesman for the Massachusetts Nurses Association, who called it "obscene," and furthermore,

We're paying this failure of a CEO millions of dollars.

Nevertheless, heaven forfend that a hospital board of trustees would try to withhold pay for a CEO, even pay provided years after that CEO's departure, that might violate a previously written contract, even new information discovered might now provide reasons to challenge that contract.

So here is an amazing example in which a former hospital system CEO continues to be rewarded with millions of dollars after he actually left his employment as CEO. These rewards started even though the financial turnaround he supposedly engineered required layoffs of health care professionals serving vulnerable patients The hospital system board of trustees continued to authorize, and failed to question these payments even after subsequent revelations that the CEO's initial hiring was apparently based on a false impression of the financial performance of his previous hospital system generated by accounting problems within that system, and that the CEO had behaved unprofessionally in obtaining prescriptions of controlled substances for his family and for himself.

As we have said before, in US health care, the top managers/ administrators/ bureaucrats/ executives - whatever they should be called - continue to prosper
ever more mightily as the people who actually take care of patients
seem to work harder and harder for less and less. This is the health
care version of the rising income inequality that the US public is
starting to notice.

Thus, like hired managers in the larger economy, non-profit hospital managers have become "value extractors."
The opportunity to extract value has become a major driver of
managerial decision making. And this decision making is probably the
major reason our health care system is so expensive and inaccessible,
and why it provides such mediocre care for so much money.

One wonders how long the people who actually do the work in health care will suffer the value extraction to continue?

But this sort of reform would challenge the interests of managers who are getting very rich off the current system. So I am
afraid the US may end up going far down this final common pathway before
enough people manifest enough strength to make real changes.

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